Government Intervenes Against Integrated Health Care System in False Claims Act Suit

DOJ News

Government Intervenes Against Integrated Health Care System in False Claims Act Suit

The Department of Justice (the DOJ) announced that it has filed a complaint-in-intervention in a suit brought in federal district court in Indiana against Community Health Network Inc. (Community) by a relator under the qui tam provisions of the False Claims Act.

The DOJ alleges that Community, an integrated health care system in central Indiana, violated the FCA by submitting claims for Medicare reimbursements that were tainted by Stark Law violations. The Stark Law generally prohibits a hospital from billing government health care programs for services referred by a physician with whom the hospital has an improper financial relationship that does not meet a statutory or regulatory exception.

The DOJ alleges that Community’s relationship with several physicians did not satisfy any exception to the Stark Law because the physicians’ compensation was above fair market value and Community conditioned payment of bonuses on their achieving a minimum target of referral revenues to the hospital. The case is captioned United States ex rel. Fischer v. Community Health Network, Inc., No. 1:14-cv-1215 (RLY-DKL) (S.D. Ind.).

The DOJ press release can be found here.

Texas State Agency Agrees to Pay $15 Million to Resolve False Claims Act Allegations

The DOJ announced that the Texas Health and Human Services Commission (THHSC) has agreed to pay $15,294,360 to resolve allegations that the THHSC violated the False Claims Act in administering the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program.

The DOJ alleged that the THHSC implemented recommendations provided by a consulting firm, which injected bias into the THHSC’s quality control process, resulting in the THHSC submitting false quality control data and information to the United States Department of Agriculture (USDA).

The DOJ further alleged that, as a result of the foregoing, THHSC received performance bonuses from the USDA to which it was not entitled. The DOJ reported that this settlement represented its fourth settlement with a state agency, and fifth settlement overall, in this matter.

The DOJ press release can be found here.

Swiss Banks Agree to Pay Additional Penalties in Addenda to Non-Prosecution Agreements

The DOJ announced that it signed addenda to non-prosecution agreements with two private Swiss banks, Union Bancaire Privée, UBP SA (UBP), and Coutts & Co Ltd. (Coutts), requiring the banks to pay additional penalties related to previously undisclosed US-related accounts (the US-Related Accounts). The original agreements were reached in connection with the Swiss Bank Program, announced in 2013, which provided a path for Swiss banks to resolve potential criminal liability in the US relating to offshore banking services provided to US taxpayers.

The DOJ signed the original non-prosecution agreement with UBP in January 2016, resulting in UBP’s payment of a penalty of over $187 million. According to the DOJ, at that time, UBP had reported that it managed 2,919 US-Related Accounts with assets under management of roughly $4.9 billion. In agreeing to the addendum, UBP acknowledged that it should have disclosed additional US-Related Accounts when it signed the original non-prosecution agreement. Pursuant to the addendum, UBP has acknowledged that there were additional US-Related Accounts that it knew or should have known about. UBP has also agreed to pay an additional $14 million and to provide supplemental information regarding its US-Related Accounts.

The DOJ signed the original non-prosecution agreement with Coutts in December 2015, resulting in Coutts’s payment of a $78,484,000 penalty. According to the DOJ, at that time, Coutts had reported that it managed 1,337 US-Related Accounts with assets under management exceeding $2 billion. In agreeing to the addendum, Coutts acknowledged that it should have disclosed additional US-Related Accounts when it signed the original non-prosecution agreement. Pursuant to the addendum, Coutts acknowledged that there were additional US-Related Accounts that it knew or should have known about. Coutts has also agreed to pay an additional $27.9 million and to provide supplemental information regarding its US-Related Accounts.

The DOJ press releases can be found here and here.